Applications for unemployment benefits in the US also spiked last week, reflecting the impact of superstorm Sandy, while official government figures have revealed the cost of living rose by 0.1 per cent last month.

The Dow Jones Industrial Average lost 0.2 per cent to 12,542, the S&P 500 also lost 0.2 per cent, to 1,353 and the Nasdaq Composite Index fell 0.4 per cent, to 2,837.

European stocks also closed lower overnight, after news that the 17-nation eurozone economy fell into recession in the third quarter, due to the ongoing sovereign debt crisis in the region.

Sentiment also took a hit because of ongoing fears of a potential Greek default and nervousness about economic prospects in the US.

In London, the FTSE 100 closed down 44 points to 5,678, with some worse-than-expected British retail sales also weighing on the market.

The Australian dollar has edged lower; at 9am (AEDT) it was buying 103.3 US cents, 80.8 euro cents, 83.9 Japanese yen, 65.1 British pence and nearly $NZ1.28.

In commodity trade, West Texas Crude has eased to $US85.41 a barrel, Tapis is quoted at $US115.08, while the spot price of gold has fallen to around $US1,716.40 an ounce.